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A carefully orchestration closing meets financial confusion

We recently sold our home and purchased a new one. Everything wasscheduled to close the same day. Then, thevendor of our new home informed his lawyer, and then ours, thathe couldn’t close because he owed more on the property than we werepaying for the home.

Question
We recently sold our home and purchased a new one. Everything was scheduled to close the same day. We had an appointment with our lawyer the morning of closing and when we arrived, he indicated that the vendor of our new home had just informed his lawyer, and then him, that he couldn’t close because he owed more on the property than we were paying for the home.


Our lawyer offered his advice that we should proceed with our sale and that we extend for a couple of days to allow the vendor the ability to raise more funds in order to pay his mortgage out. We are at a loss and wonder if you have any advice?


Answer
Well, the first thing you need to be aware of is that the sale of your present home and the purchase of your new home are not legally linked together. Therefore, if you considered not closing your sale so you had a place to stay while the new home was possibly ready, you are putting yourself at jeopardy of a lawsuit on the sale of your home.


Second, your lawyer should be able to give you a feeling for the proposed delayed transaction and if he had any indicators that the transaction was not going to close. Obviously, your lawyer cannot tell you without some hesitation whether he thinks you will close but there are a number of factors at play here. If the vendor’s lawyer suggested that he was almost certain that the vendor just needed a couple of days to get his finances straightened out, then you are much further ahead.


Your lawyer should insist that your out-of-pocket expenses are paid as if you had moved the same day.


Extensions of closings happen more often than you might think. Best of luck with a situation outside of the control of your lawyer and remember, you have hired him to work on your behalf, to do his best to get you into the home of your dreams (so don’t shoot the messenger).

 
 
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